6 November 2016
HSBC BANK CANADA
THIRD QUARTER 2016 RESULTS
• Profit before income tax expense for the quarter ended 30 September 2016 was $138m, a decrease of
26.2% compared with the same period in 2015. Profit before income tax expense was $464m for the
year to date, a decrease of 28.1% compared with the same period in 2015.
• Profit attributable to the common shareholder was $91m for the quarter ended 30 September 2016, a
decrease of 28.9% compared with the same period in 2015. Profit attributable to the common
shareholder was $308m for the year to date, a decrease of 31.9% compared with the same period in
2015.
• Return on average common equity was 7.7% for the quarter ended 30 September 2016 compared with
11.0% for the same period in 2015. Return on average common equity was 9.0% for the year to date
compared with 13.1% for the same period in 2015.
• The cost efficiency ratio was 66.0% for the quarter ended 30 September 2016 compared with 57.5% for
the same period in 2015. The cost efficiency ratio was 59.4% for the year to date compared with 55.1%
for the same period in 2015.
• Total assets were $95.2bn at 30 September 2016 compared with $94.0bn at 31 December 2015.
• Common equity tier 1 capital ratio was 10.7%, tier 1 ratio 12.7% and total capital ratio 13.8% at 30
September 2016 compared with 10.1%, 12.1% and 13.5% respectively at 31 December 2015.
The abbreviations‘$m’ and ‘$bn’ represent millions and billions of Canadian dollars,
respectively.
This news release is issued by
HSBC Bank Canada
1
HSBC Bank Canada
Financial Commentary
Overview
HSBC Bank Canada reported a profit before income tax expense of $138m for the third quarter of 2016, a
decrease of $49m, or 26.2%, compared with the third quarter of 2015. Profit before income tax expense
was $464m for the year to date, a decrease of $181m, or 28.1%, compared with the same period in 2015.
The decreases are in part due to higher loan impairment charges largely reflecting charges related to the
oil and gas sectors, increased investment in global standards, risk and compliance activities, and other
strategic initiatives to deliver future savings.
In Commercial Banking, international subsidiary banking continued to drive growth in our strategic trade
corridors and our market leading global trade and cash management platforms helped us win new clients
and drove fee income. The business continues to focus on enhancing and simplifying its delivery model,
improving productivity for the benefit of our customers and employees.
Global Banking and Markets increased trading revenues as well as lending and credit activities on a year
to date basis by leveraging HSBC’s global network on behalf of its clients.
Retail Banking and Wealth Management benefited from growth in residential mortgages and deposits
during the year, with a key focus on revenue in a highly competitive low interest rate market environment.
Commenting on the results, Sandra Stuart, President and Chief Executive Officer of HSBC Bank Canada,
said:
"Against the backdrop of a global economy that most economists observe is stuck in low gear, our
business remains profitable, stable, liquid and continues to demonstrate resilience. Profit before tax (PBT)
is $138M, down 26% compared to the third quarter last year. However, PBT improved in each of the last
three quarters and in our largest business, Commercial Banking, loan impairment charges have continued
to decline. Though there are signs the oil and gas sector is stabilizing, we continue to closely manage our
risk and assist our customers in coping with lower prices. For our Global Banking and Markets business,
PBT for the first nine months is 7% higher than the same period last year, largely due to increased trading
revenues and lending and credit activities. Retail Banking and Wealth Management benefited from growth
in residential mortgages and deposits, with a key focus on revenue in a highly competitive low interest
rate environment. PBT was $17m for the third quarter of 2016, a decrease of $1m, or 6%, compared with
the third quarter of 2015. Our overall operating expenses for the period increased year over year as we
continued to invest in enhanced compliance and making our business more efficient to drive future cost
savings.
We remain focussed on building and sustaining customer relationships as we invest to grow in Canada.
Commercial Banking continues to work closely with Canadian companies seeking international expansion
across trade corridors with the US and Greater China; our Retail Banking and Wealth Management
business is implementing digitization and branch updates to deliver simpler, faster and better service for
our individual customers; and our Global Banking and Markets team increasingly supports both public
and private sector customers as they deliver the country’s infrastructure projects.”
2
HSBC Bank Canada
Financial Commentary
Analysis of consolidated financial results for the third quarter of 2016
Net interest income for the third quarter of 2016 was $284m, largely in line with the third quarter of 2015.
Net interest income for the year to date was $845m, a decrease of $16m, or 1.9%, compared with the same
period in 2015. The decreases over comparative periods were mainly driven by lower spreads in a
competitive low interest rate environment driven by lower Bank of Canada rates, and the continued runoff of the consumer finance portfolio. This was partially offset by residential mortgage growth and higher
average yield on financial investments.
Net fee income for the third quarter of 2016 was $166m, largely in line with the third quarter of 2015. Net
fee income for the year to date was $498m, a decrease of $20m, or 3.9%, compared with the same period
in 2015. The decrease was primarily driven by decreased fees from leveraged and acquisition finance.
Net trading income for the third quarter of 2016 was $29m, a decrease of $19m, or 39.6%, compared
with the third quarter of 2015. The decrease was mainly driven by unfavourable changes to the Debt
Valuation Adjustment (‘DVA’) on derivative contracts due to the tightening of HSBC's own credit spreads.
Also, other comprehensive income was recycled to the income statement due to the hedge accounting
criteria not having been met, negatively impacting net trading income. Net trading income for the year to
date was $145m, an increase of $41m, or 39.4%, compared with the same period in 2015. The increase
was mainly driven by favourable trading performance in the rates business and favourable changes to the
Credit Valuation Adjustment (‘CVA’) on derivative contracts due to the tightening of customer credit
spreads. This is partially offset by derivative fair value movements recycled to the income statement due
to hedge accounting criteria not having been met, negatively impacting net trading in 2015.
Gains less losses from financial investments for the third quarter of 2016 were $3m, an increase of $1m,
or 50.0%, compared with the third quarter of 2015. Gains less losses from financial investments for the
year to date was $30m, a decrease of $26m, or 46.4%, compared with the same period in 2015. Gains on
sale of available-for-sale debt securities arose from the continued rebalancing of the balance sheet
management liquid assets.
Other operating income for the third quarter of 2016 was $17m, an increase of $1m, or 6.3%, compared
with the third quarter of 2015. Other operating income for the year to date was $52m, an increase of $6m,
or 13.0% compared with the same period in 2015. The increases were mainly due to higher intercompany activities, partially offset by losses on the sale of specific commercial loans, and non-recurring
recoveries recognized in comparative periods.
Loan impairment charges and other credit risk provisions for the third quarter of 2016 were $29m, a
decrease of $2m compared with the third quarter of 2015. Loan impairment charges and other credit risk
provisions for the year to date were $168m, an increase of $98m compared with the same period in 2015.
The year-to-date increases over the comparative periods largely reflect charges related to the oil and gas
sectors.
3
HSBC Bank Canada
Financial Commentary
Total operating expenses for the third quarter of 2016 were $328m, an increase of $30m, or 10.1%,
compared with the third quarter of 2015. Total operating expenses for the year to date were $930m, an
increase of $55m, or 6.3%, compared with the same period in 2015. The increases over the comparative
periods were driven by continued investments in the implementation of global standards and efficiency
initiatives to deliver future savings, as well as the adverse impact caused by the lower Canadian dollar on
expenses denominated in foreign currencies.
Share of profit in associates represents changes in the value of the bank’s investment in certain private
equity funds. Share of profit in associates for the third quarter of 2016 was a loss of $3m, a decrease of
$1m compared with the third quarter of 2015. Share of profit in associates for the year to date was a loss
of $5m, a decrease of $6m compared with the same period in 2015.
Income tax expense. The effective tax rate in the third quarter of 2016 was 28.0%, compared with 27.7%
in the second quarter of 2016 and 26.7% in the third quarter of 2015. The change reflects the difference in
income earned from investments in partnerships.
Movement in financial position
Total assets at 30 September 2016 were $95.2bn, an increase of $1.2bn from 31 December 2015. Trading
assets increased by $2.4bn due to increased trading debt securities. Balance sheet management activities
increased financial investments by $0.2bn and decreased reverse repurchase agreements - non-trading by
$0.5bn. Loans and advances to customers decreased by $1.1bn due to lower credit facility utilization
partially offset by increased new-to-bank activities. Derivatives decreased by $1.0bn mainly due to lower
foreign exchange and commodity contracts partially offset by an increase in interest rate contracts.
Customers' liability under acceptances increased by $1.0bn due to an increase in the volume of
acceptances.
Total liabilities at 30 September 2016 were $89.6bn, an increase of $1.0bn from 31 December 2015.
Trading liabilities increased by $2.1bn mainly due to higher securities short positions from client
facilitation trades and timing of settlement. Other liabilities increased by $1.9bn largely due to a longterm borrowing. Acceptances increased by $1.0bn due to an increase in the volume of acceptances.
Balance sheet management activities decreased deposits by banks and reverse repurchase agreements
non-trading by $1.5bn and $0.9bn respectively. $0.5bn of debt securities matured during the period.
Derivatives decreased by $0.8bn mainly due to a decrease in foreign exchange and commodity contracts
partially offset by increase in interest rate contracts.
Total equity at 30 September 2016 was $5.6bn, an increase of $0.2bn from 31 December 2015, due to
profits generated in the period net of dividends paid on common shares and preferred shares.
4
HSBC Bank Canada
Financial Commentary
Business performance in the third quarter of 2016
Commercial Banking
Profit before income tax expense was $100m for the third quarter of 2016, a decrease of $3m, or 3%,
compared with the third quarter of 2015. Profit before income tax expense for the year to date was
$223m, a decrease of $134m, or 38%, compared with the same period in 2015. Profit before income tax
expense for the year to date was down primarily due to increased loan impairment charges largely
reflecting challenges in the oil and gas sectors, increased funding costs, lower deposit margins due to
lower Bank of Canada rates, and lower loans and advances, partially offset by lower operating expenses.
Global Banking and Markets
Profit before income tax expense was $64m for the third quarter of 2016, a decrease of $5m, or 7%,
compared with the third quarter of 2015. The decrease from the same period in prior year was driven by
decreased trading revenues from unfavourable changes to the DVA on derivative contracts due to the
tightening of HSBC's own credit. Also, other comprehensive income was recycled to the income
statement due to hedge accounting criteria not having been met, negatively impacting net trading income
in the third quarter of 2016. This was partially offset by higher net yields on available-for-sale financial
investments and higher credit, lending and transactional banking activities.
Profit before income tax expense was $262m for the year to date, an increase of $18m, or 7%, compared
with the same period in 2015. The increase from the same period in 2015 was driven by favourable
trading performance in the rates business and favourable changes to the CVA on derivative contracts due
to the tightening of customer credit spreads. This was partially offset by derivative fair value movements
recycled to the income statement due to hedge accounting criteria not having been met, negatively
impacting net trading income in 2015.
Retail Banking and Wealth Management
Profit before income tax expense relating to ongoing business (excluding the run-off consumer finance
portfolio) was $11m for the third quarter of 2016, an increase of $2m, or 22%, compared with the third
quarter of 2015. Profit before income tax expense relating to ongoing business was $32m for the year to
date, an increase of $3m, or 10%, compared with the same period in 2015. The increases in profit before
income tax expense relating to ongoing business were due to higher net interest income, partially offset
by investments in strategic initiatives.
Other
Loss before income tax expense was $43m for the third quarter of 2016, an increase of $40m compared
with the third quarter of 2015. Loss before income tax expense was $74m for the year to date, an increase
of $59m compared with the same period in 2015. The increased losses compared with the comparative
periods were mainly from investments in initiatives to deliver future savings. As well, the narrowing of
credit spreads on financial instruments designated at fair value and a transitional change in the liquidity
funds transfer pricing policy framework negatively impacted net interest income for the year to date.
5
HSBC Bank Canada
Financial Commentary
Dividends
During the third quarter of 2016, the bank declared and paid $48m in dividends on HSBC Bank Canada
common shares, a decrease of $40m compared with the same quarter last year, and $9m in dividends on
all series of HSBC Bank Canada Class 1 preferred shares, consistent with the same quarter last year.
Common share dividends of $197m have been declared on HSBC Bank Canada common shares and will
be paid on or before 31 December 2016 to the holder of record on 3 November 2016.
Regular quarterly dividends have been declared on all series of HSBC Bank Canada Class 1 preferred
shares in the amounts of $0.31875, $0.3125 and $0.25 for Series C, Series D and Series G respectively
and will be paid on 31 December 2016 for shareholders of record on 15 December 2016.
Use of non-IFRSs financial measures
In measuring our performance, the financial measures that we use include those which have been derived
from our reported results. However these are not presented within the Financial Statements and are not
defined under IFRSs. These are considered non-IFRSs financial measures and are unlikely to be
comparable to similar measures presented by other companies. The following non-IFRSs financial
measures are used throughout this document and their purposes and definitions are discussed below:
Financial position ratios
These measures are indicators of the stability of the bank’s balance sheet and the degree funds are deployed
to fund assets.
Ratio of customer advances to customer accounts is calculated by dividing loans and advances to customers
by customer accounts using period-end balances.
Average total shareholders’ equity to average total assets is calculated by dividing average total shareholders’
equity with average total assets (determined using month-end balances) for the period.
Return ratios
Return ratios are useful for management to evaluate profitability on equity, assets and risk-weighted assets.
Return on average common shareholder’s equity is calculated as profit attributable to the common shareholder
for the period divided by average common equity (determined using month-end balances during the period).
Post-tax return on average total assets is calculated as profit attributable to common shareholders for the
period divided by average assets (determined using average month-end balances during the period).
Pre-tax return on average risk-weighted assets is calculated as the profit before income tax expense divided
by the average monthly balances of risk-weighted assets for the period. Risk-weighted assets are calculated
using guidelines issued by OSFI in accordance with the Basel III capital adequacy framework.
6
HSBC Bank Canada
Financial Commentary
Credit coverage ratios
Credit coverage ratios are useful to management as a measure of the extent of incurred loan impairment
charges relative to the bank’s performance and size of its customer loan portfolio during the period.
Loan impairment charges to total operating income is calculated as loan impairment charges and other credit
provisions, as a percentage of total operating income for the period.
Loan impairment charges to average gross customer advances and acceptances is calculated as annualized
loan impairment charges and other credit provisions for the period as a percentage of average gross customer
advances and acceptances (determined using month-end balances during the period).
Total impairment allowances to impaired loans at period-end are useful to management to evaluate the
coverage of impairment allowances relative to impaired loans using period-end balances.
Efficiency and revenue mix ratios
Efficiency and revenue mix ratios are measures of the bank’s efficiency in managing its operating expense
to generate revenue and demonstrates the contribution of each of the primary revenue streams to total income.
Cost efficiency ratio is calculated as total operating expenses as a percentage of total operating income for
the period.
Adjusted cost efficiency ratio is calculated similar to the cost efficiency ratio; however, total operating income
excludes gains and losses from financial instruments designated at fair value, as the movement in value of
the bank’s own subordinated debt issues are primarily driven by changes in market rates and are not under
the control of management.
Net interest income, net fee income and net trading income as a percentage of total operating income is
calculated as net interest income, net fee income and net trading income divided by total operating income
for the period.
About HSBC Bank Canada
HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in the country.
We help companies and individuals across Canada to do business and manage their finances
internationally through three global business lines: Commercial Banking, Global Banking and Markets,
and Retail Banking and Wealth Management. Canada is a priority market for the HSBC Group - one of
the world’s largest banking and financial services groups with assets of US$2,557bn at 30 September
2016. Linked by advanced technology, HSBC serves customers worldwide through an international
network of around 4,400 offices in 71 countries and territories in Europe, Asia, North and Latin America,
and the Middle East and North Africa.
Media enquiries to: Sharon Wilks
Aurora Bonin
416-868-3878
604-641-1905
[email protected]
[email protected]
Copies of HSBC Bank Canada’s Third Quarter 2016 Interim Report will be sent to shareholders in
November 2016.
7
HSBC Bank Canada
Summary
($ millions, except where otherwise stated)
Quarter ended
30 September 2016
Nine months ended
30 September 2015
30 September 2016
30 September 2015
Finance performance for the period
Total operating income ............................................................
Profit before income tax expense.............................................
Profit attributable to the common shareholder.........................
Basic earnings per common share ($)......................................
498
138
91
0.18
518
187
128
0.26
1,567
464
308
0.61
1,589
645
452
0.91
Performance ratios (%)1
Return ratios (%)1..................................................................
Return on average common shareholders’ equity....................
Post-tax return on average total assets .....................................
Pre-tax return on average risk-weighted assets2 ......................
7.7
0.38
1.3
11.0
0.56
1.7
9.0
0.44
1.5
13.1
0.66
2.0
5.4
6.0
10.7
4.5
0.2
0.3
0.5
0.2
58.1
71.5
58.1
71.5
66.0
65.9
57.5
57.8
59.4
59.3
55.1
55.2
57.1
33.4
5.8
55.0
31.9
9.3
54.0
31.8
9.2
54.2
32.6
6.5
Credit coverage ratios (%)1
Loan impairment charges to total operating income................
Loan impairment charges to average gross customer
advances and acceptances ........................................................
Total impairment allowances to impaired loans and advances
at period-end ............................................................................
Efficiency and revenue mix ratios (%)1
Cost efficiency ratio .................................................................
Adjusted cost efficiency ratio ..................................................
As a percentage of total operating income:
- net interest income..............................................................
- net fee income.....................................................................
- net trading income ..............................................................
At period ended
30 September 2016 31 December 2015
Financial position at period-end
Loan and advances to customers..............................................
Customer accounts ...................................................................
Ratio of customer advances to customer accounts (%)1 ..........
Shareholders’ equity.................................................................
Average total shareholders’ equity to average total assets
(%)1 ..........................................................................................
Capital measures2
Common equity tier 1 capital ratio (%) ................................
Tier 1 ratio (%)......................................................................
Total capital ratio (%) ...........................................................
Leverage ratio (%) ................................................................
Risk-weighted assets.............................................................
47,259
54,914
86.1
5,552
48,378
55,089
87.8
5,376
5.8
5.7
10.7
12.7
13.8
4.8
41,915
10.1
12.1
13.5
4.7
42,846
1 Refer to the 'Use of non-IFRS's financial measures' section of this document for a discussion of non-IFRS's financial measures.
2 The bank assesses capital adequacy against standards established in guidelines issued by OSFI in accordance with the Basel III capital adequacy
frameworks.
8
HSBC Bank Canada
(Figures in $m, except per share amounts)
Consolidated income statement (unaudited)
Quarter ended
30 September 2016
Nine months ended
30 September 2015
30 September 2016
30 September 2015
Interest income ................................................................
Interest expense ...............................................................
Net interest income..........................................................
440
(156)
284
422
(137)
285
1,299
(454)
845
1,283
(422)
861
Fee income ......................................................................
Fee expense .....................................................................
Net fee income.................................................................
181
(15)
166
186
(21)
165
548
(50)
498
575
(57)
518
Trading income excluding net interest income ...............
Net interest income on trading activities .........................
Net trading income ..........................................................
24
5
29
35
13
48
131
14
145
76
28
104
Net (expense)/income from financial instruments
designated at fair value....................................................
(1)
2
(3)
4
Gains less losses from financial investments ..................
Other operating income ...................................................
Total operating income..................................................
3
17
498
2
16
518
Loan impairment charges and other credit risk
provisions ........................................................................
(29)
(31)
Net operating income ....................................................
469
487
Employee compensation and benefits .............................
General and administrative expenses ..............................
Depreciation of property, plant and equipment ...............
Amortisation and impairment of intangible assets ..........
Total operating expenses ...............................................
(163)
(155)
(8)
(2)
(328)
(167)
(121)
(7)
(3)
(298)
(496)
(404)
(23)
(7)
(930)
(504)
(339)
(22)
(10)
(875)
Operating profit.............................................................
141
189
469
644
Share of (loss)/profit in associates...................................
Profit before income tax expense .................................
(3)
138
(2)
187
(5)
464
1
645
Income tax expense .........................................................
Profit for the period.......................................................
(38)
100
(50)
137
(128)
336
(170)
475
Profit attributable to the common shareholder ................
Profit attributable to preferred shareholders....................
Profit attributable to shareholders ...................................
91
9
100
128
9
137
308
28
336
452
18
470
Profit attributable to non-controlling interest ..................
—
—
—
5
Average number of common shares outstanding (000's).
Basic earnings per common share ($) .............................
498,668
0.18
498,688
0.26
498,668
0.62
498,668
0.91
9
30
52
1,567
(168)
1,399
56
46
1,589
(70)
1,519
HSBC Bank Canada
Consolidated balance sheet (unaudited)
(Figures in $m)
30 September 2016
31 December 2015
51
68
6,301
3,914
1,575
47,259
6,265
24,136
347
232
4,864
97
65
95,174
65
73
3,893
4,909
1,400
48,378
6,807
23,935
365
194
3,834
110
61
94,024
Liabilities
Deposits by banks .........................................................................................................................
Customer accounts ........................................................................................................................
Repurchase agreements – non-trading ..........................................................................................
Items in the course of transmission to other banks .......................................................................
Trading liabilities ..........................................................................................................................
Financial liabilities designated at fair value..................................................................................
Derivatives ....................................................................................................................................
Debt securities in issue..................................................................................................................
Other liabilities..............................................................................................................................
Acceptances ..................................................................................................................................
Accruals and deferred income ......................................................................................................
Retirement benefit liabilities.........................................................................................................
Subordinated liabilities .................................................................................................................
Total liabilities ..............................................................................................................................
562
54,914
5,660
159
3,799
405
4,242
10,444
3,735
4,864
427
372
39
89,622
2,049
55,089
6,606
219
1,713
414
5,005
10,896
1,822
3,834
474
288
239
88,648
Equity
Preferred shares.............................................................................................................................
Common shares.............................................................................................................................
Other reserves ...............................................................................................................................
Retained earnings..........................................................................................................................
Total equity ...................................................................................................................................
850
1,225
167
3,310
5,552
850
1,225
92
3,209
5,376
Total equity and liabilities.............................................................................................................
95,174
94,024
ASSETS
Cash and balances at central bank ................................................................................................
Items in the course of collection from other banks.......................................................................
Trading assets................................................................................................................................
Derivatives ....................................................................................................................................
Loans and advances to banks........................................................................................................
Loans and advances to customers .................................................................................................
Reverse repurchase agreements – non-trading .............................................................................
Financial investments....................................................................................................................
Other assets ...................................................................................................................................
Prepayments and accrued income.................................................................................................
Customers’ liability under acceptances.........................................................................................
Property, plant and equipment ......................................................................................................
Goodwill and intangible assets .....................................................................................................
Total assets ....................................................................................................................................
LIABILITIES AND EQUITY
10
HSBC Bank Canada
Consolidated statement of cash flows (unaudited)
Nine months ended
30 September 2016
30 September 2015
Cash flows generated from/(used in):
Operating activities ...................................................................................................................................
Investing activities ....................................................................................................................................
Financing activities ...................................................................................................................................
Net (decrease)/increase in cash and cash equivalents..................................................................................
Cash and cash equivalents, beginning of period..........................................................................................
Cash and cash equivalents, end of period ....................................................................................................
393
(129)
(372)
(108)
1,983
1,875
5,795
(5,382)
13
426
2,337
2,763
Represented by:
Cash and balances at central bank ............................................................................................................
Items in the course of transmission to other banks, net ............................................................................
Loans and advances to banks of one month or less ..................................................................................
Reverse repurchase agreements with banks of one month or less ............................................................
Treasury bills and certificates of deposits of three months or less ...........................................................
Cash and cash equivalents, end of period ....................................................................................................
51
(91)
1,575
265
75
1,875
59
(135)
1,373
493
973
2,763
11
HSBC Bank Canada
(Figures in $m)
Global business segmentation (unaudited)
Quarter ended
30 September 2016
30 September 2015
Commercial Banking
Net interest income..................................................................
Net fee income.........................................................................
Net trading income ..................................................................
Gains less losses from financial investments ..........................
Other operating income ...........................................................
Total operating income ............................................................
Loan impairment charges and other credit risk provisions .....
Net operating income ..............................................................
Total operating expenses .........................................................
Operating profit .......................................................................
Share of (loss)/profit in associates...........................................
Profit before income tax expense ............................................
Nine months ended
30 September 2016
30 September 2015
135
80
9
—
3
227
(27)
200
(97)
103
(3)
100
149
80
9
—
6
244
(30)
214
(109)
105
(2)
103
407
237
24
3
13
684
(155)
529
(301)
228
(5)
223
453
238
25
—
16
732
(60)
672
(316)
356
1
357
55
32
9
3
(1)
98
42
29
28
2
—
101
157
99
89
28
(6)
367
133
112
42
56
—
343
Global Banking and Markets
Net interest income..................................................................
Net fee income.........................................................................
Net trading income ..................................................................
Gains less losses from financial investments ..........................
Other operating loss.................................................................
Total operating income ............................................................
Loan impairment recovery/(charges) and other credit risk
provisions ................................................................................
Net operating income ..............................................................
Total operating expenses .........................................................
Profit before income tax expense ............................................
1
—
(5)
(2)
99
(35)
64
101
(32)
69
362
(100)
262
341
(97)
244
Retail Banking and Wealth Management
Net interest income..................................................................
Net fee income.........................................................................
Net trading income ..................................................................
Other operating income ...........................................................
Total operating income ............................................................
Loan impairment charges and other credit risk provisions .....
Net operating income ..............................................................
Total operating expenses .........................................................
Profit before income tax expense ............................................
102
54
6
3
165
(3)
162
(145)
17
101
56
5
2
164
(1)
163
(145)
18
305
162
16
12
495
(8)
487
(434)
53
295
168
17
11
491
(8)
483
(424)
59
(8)
5
(7)
6
(24)
16
(20)
20
(1)
2
(3)
4
—
12
8
(51)
(43)
—
8
9
(12)
(3)
(1)
33
21
(95)
(74)
—
19
23
(38)
(15)
Other
Net interest expense.................................................................
Net trading income ..................................................................
Net (expense)/income from financial instruments designated
at fair value ..............................................................................
Gains less losses from financial investments ..........................
Other operating income ...........................................................
Net operating income ..............................................................
Net operating expenses............................................................
Loss before income tax expense..............................................
12